Here’s What to Watch in European Stocks This Morning

(Bloomberg) -- Good morning. Here’s what to watch ahead of the European market open, including investors on tenterhooks awaiting the outcome of trade talks, reducing the no-deal Brexit threat and more misery in the chipmaking sector.

Waiting for Trade

Markets in Asia are mixed and a similar holding pattern is likely for Europe on Tuesday as the outcome of the highly anticipated talks between U.S. and Chinese officials over trade is awaited. Trade-sensitive names in the autos, technology and mining sectors could all be impacted should any substantive progress be made by the two countries. This is all ahead of a planned prime-time televised address by President Donald Trump on Tuesday in the midst of both those talks and the negotiations domestically to end a government shutdown.

Reducing the No-Deal Threat

Brexit is back as a risk, as investors watch efforts to diminish the chance the U.K. will leave the European Union without a deal in place. Prime Minister Theresa May is said to be planning to accept a proposal from pro-EU politicians that would make it more difficult to leave without a deal. Unfortunately for the PM, that could also weaken her tactic of using the threat of crashing out with no agreement to push through her own proposals. Much more of this is likely to come before the meaningful vote on May’s plans, due next week.

More Chip Misery

Semiconductor stocks staged another rally on Monday but some of the sheen may be wiped off after Samsung Electronics Co. Ltd.’s quarterly profit and sales missed estimates amid weakening demand for memory chips. It echoes a prior warning by Micron Technology Inc. and adds to the woes inflicted on the market by Apple Inc.’s guidance downgrade last week. Given the recovery in the past two sessions for technology stocks and in spite of underlying optimism on the trade talks, this could weigh heavily.

Festive Nibbles and Tipples

Two U.K. companies will give a little more insight into how much British consumers spent during a holiday season clouded by Brexit. Wm Morrison Supermarkets Plc’s numbers will indicate how well grocers fared and whether Brits were splurging on pricey food or whether they were more interested in getting value for money, as the numbers from German discounter Aldi indicate. The U.K.’s bellwether pub chain Greene King Plc will also update and give a pointer for its peers about how many hours were spent eating and drinking in taverns rather than at home.

European Construction

Another two names to watch for an update on the health of both the U.K. and across Europe: SIG Plc will give an update on the state of the U.K. building materials market, a closely watched indicator of consumer confidence and house building activity. Swiss construction materials maker Sika AG already reported and its results were in line, but it did announce the $2.6 billion acquisition of U.K.-based construction chemicals and industrial adhesives firm Parex Ltd., potentially signaling that health care is not the only sector where some dealmaking can be expected this year.

To contact the editor responsible for this story: Phil Serafino at pserafino@bloomberg.net

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